Tag: Latino workers

By Stephanie Luce, Associate Professor, CUNY, and Mark Paul, Research associate at The Cook Center on Social Equity at Duke University, and economics instructor at the University of Massachusetts-Amherst

Corporate profits are booming, and U.S. workers remain some of the most productive in the world. Yet tens of millions of workers still earn hourly wages that fall below the federal poverty line. These unjust wages are particularly hitting workers of color. But a simple policy change can fix this — a $15 minimum wage. This would boost income for over half of black workers and 59 percent of Latino workers. But is this a change we can afford?

Put in a historical context, the federal minimum, currently at $7.25, is far below its historic peak and nowhere close to a living wage. In fact, if the minimum wage rose in step with inflation and average labor productivity since 1968, it would currently be $26 an hour.

Workers across the country have been calling for a minimum wage of $15 per hour. Two decades ago, mainstream economists warned that raising the minimum wage would force employers to lay-off workers, but slowly that consensus has shifted. In the past twenty years, over 140 cities and counties have passed living wage ordinances, and dozens of states have raised their state minimum wage. In the last three years alone, more than 30 cities and counties have set citywide minimum wages. This has allowed economists to test their theories, and the results show it is possible to raise the minimum wage and not see job loss. Indeed, higher minimum wages have led to positive outcomes for workers, employers, and communities.

The evidence that minimum wage increases are necessary and beneficial piles up. Now, the debate is more often centered on “how high to raise the wage, and how fast.” It’s time for a federal strategy. Only one candidate — Bernie Sanders — has endorsed the call for a $15 federal minimum wage by 2020 through the Pay Workers a Living Wage Act. Hillary Clinton backs a modest $12 wage, while some Republicans have called to lower or even eliminate the minimum wage altogether.

The research we have available to date suggests that a $15 minimum wage is economically feasibly. Political will stands in the way of lifting incomes for the majority of working families–Sanders’ plan is different. Hundreds of economists have already backed Senator Sanders’ plan on the $15 minimum wage. Even fast-food restaurants, which rely heavily on low-wage labor, would be able to absorb the wage increase without cutting jobs. Other countries have also shown that minimum wages can rise without resulting in the predicted job loss. Germany just implemented its first-ever minimum wage in 2015, and contrary to some fears, employment went up, not down. Similarly, the UK established The UK and Australia have minimum wages significantly higher than the US.

More importantly, a $15 wage would have major impacts on workers and communities. A study by the Political Economy Research Institute estimates that over 64 million workers would benefit if we raised the wage to $15 by 2020. This includes 47 million who would directly benefit from the raise, and another 17 who are earning just above $15 and would likely get a “ripple effect” These 64.7 million people comprise a major portion of the entire labor force (43.5%).

Critics say raising the minimum wage won’t solve poverty, and they are right. The minimum wage is only one tool in a larger set of useful policies that are necessary for addressing racial disparities and building an inclusive economy, ranging from better health care, to stronger enforcement, and a federal job guarantee for those locked out of paid employment altogether.

Raising the minimum wage doesn’t just benefit workers. Research shows that when minimum wages are raised, employers experience lower turnover and absenteeism and higher productivity. Workers are able to pay off debt, start savings accounts, and invest in education and training.

States with higher minimum wages have had stronger job growth in the past few years. When low-wage workers are paid more, they tend to spend most of their earnings, increasing aggregate demand, which can lead to an additional boost in job growth.

In a moment when people are standing up for their rights to a living wage, and asserting that Black Lives Matter, the $15 minimum wage makes sense.